A Q&A with Michael R. Wallin, CFP®, LUTCF, Optivise Advisory Services
Q: What is the presidential cycle? It’s the idea that stock returns follow the rhythm of a four-year presidential term. Market historian Yale Hirsch popularized it in 1967. The reasoning: presidents tend to push their hardest policies early in a term, then work to boost the economy as the next election approaches. Since 1950, the S&P 500 has averaged a 17.2% price gain in year three, compared with just 4.6% in the midterm year, according to Opening Bell Daily (October 17, 2026).
Q: Why is everyone talking about year three? Because its record has been unusually steady. Since 1950, the S&P 500 has declined in only two pre-election years, 2011 and 2015, and both losses were under 1%.
Q: So should clients chase the market in 2027? For most families, no. Averages hide wide swings, and history doesn’t promise the future. Even the averages depend on who’s counting: measured from 1928 instead of 1950, GuruFocus puts the year-three average closer to 14%. In 2008, an election year, the index lost 38.5%. The cycle doesn’t call every year. Overhauling a sound strategy to chase one year’s pattern adds timing risk. My first question back is simple: Has your investment goal changed?
Q: The market is already up this year. Does that change anything? It might change your allocation. As of October 26, the stock market was up 11.4% for 2026, according to GuruFocus, roughly three times the 3.7% average for a midterm year since 1928. A strong run can quietly push your stock holdings past your target. That’s a signal to rebalance, not a reason to take on more risk.
Q: What should investors do instead?
Four practical steps:
Rebalance, don’t restructure. If a rally pushes your stock allocation past your target, trim winners and rebalance into fixed income.
Watch the economy, not the calendar. Inflation, interest rates, corporate earnings, and global events outweigh any cycle trend.
Measure against your plan, not the index. Your results may differ from the headlines, better or worse, based on your diversification.
Make your giving strategic. If markets rise, consider taking your required minimum distribution while prices are elevated. If you’re 70½ or older, qualified charitable distributions (QCDs) from your IRA can support your tithing and giving.
Q: How does faith shape your approach?
Proverbs 16:8 says it well: “Better a little with righteousness than much gain with injustice.” We build diversified, long-term portfolios of companies our clients are proud to own, with every dollar tied to a purpose and a strategy.
Q: What’s the best first step?
Before the 2027 headlines start, review your allocation, your giving strategy, and whether your investments reflect your convictions. With more than 20 years of experience guiding faith-driven families, our team can help you build a plan and stay the course.
Schedule your review today: 855.378.1806
—Michael Wallin – With more than three decades in financial services, Michael Wallin and the team at Optivise Advisory Services help families align their finances with their faith.
Investment advisory services are offered through Optivise Advisory Services, LLC (Optivise)
